6 Top Secret Tricks on How To Win a Bidding War Without Offering More Money
If you’re reading this, chances are you’ve found yourself in this situation.
You see a house that you love, it’s absolutely perfect in every way. And you’re probably thinking to yourself that this is destiny! So, you make an offer, excited to hear back from the sellers, only to find out that someone offered $10,000 more then you and now you’re dream house is now gone forever.
You might think I’m being dramatic but I see this all the time, and I’d hate to see that happen to you. Which is why I’m going to share with you my top 6 secrets on how to win the bidding war.
Secret Number 1: Get Pre-Approved and Underwritten
Now I know what you’re thinking.
“Tommy that’s not a secret, everyone knows that”
Not true. I see it all the time! In fact, I’d say most buyers start looking at houses before they even know what they’re pre-approved for. Which is a no no.
Before you start looking at homes it is vital that you know how much you can afford. Plus, do you really think a seller would consider an offer from a buyer how hasn’t been approved by a bank? No.
Secret Number 2: Write The Sellers A Letter.
Now believe it or not, not all sellers are motivated by money, and some just want their home to go to a nice family. And who’s that nice family? You are!
Which is why I always recommend that my buyers write a nice letter to the sellers trying to pull at their heart strings. It ain’t easy but talk about things like how you can just see your kids playing in the back yard, or how you look forward to Christmas day snuggled up next to their fireplace. Etc.
Sure, call me crazy! But this stuff works! Maybe not all the time, but it does help.
Secret Number 3: Offer The Sellers More Earnest Money.
While maybe we can’t offer the sellers a higher purchase price, you can offer them more earnest money. A larger amount shows that you’re more serious than other buyers.
Learn more about Earnest Money by clicking here.
Another thing you can do to get the sellers attention, is to offer them nonrefundable earnest money. It is riskier, if they accept your offer and you decide to walk away or the bank pulls the plug, you’ll lose that money. But you could also mitigate the risk by saying the earnest money will only become nonrefundable after say the inspection. Which is still risky, but could also mean the difference between whether or not you get that dream house.
Secret Number 4: Make the Sellers Life As Easy As Possible
The whole point in trying to beat out other buyers and win the bidding war is by making the sellers an offer they can’t refuse. A part of this is offering to make their life as easy as possible. There are a number of ways you can do this.
Be flexible on the closing date is one option. If they need more time to close give it to them. If they need to close quicker, ask your lender to see if they could close in say 20 days.
Another option is to rent back the sellers house to the sellers for free, after it closes. You’d do this because when the sellers sell, they need a new house. And maybe they haven’t found one yet, so you agree to let them stay there for an extra month or two while they search for a new home. Or maybe they’ve found a new house to move into, but they aren’t able to move in until a couple days after they sell their current home. So, you rent them back the house for a few days while they move all their stuff to the new house.
Also check to see if there are any special circumstances. Maybe there is something else you can do to make their life easier.
Here’s an example: A few weeks ago, I sold a home where we beat out a cash offer by telling the sellers they can leave anything that they want behind. They were an older couple selling their second home and didn’t want to deal with all the extra stuff they didn’t need. So, they left it all behind.
Nothing a garage sale and a couple dump runs couldn’t take care of.
Secret Number 5: Fewer Contingencies
contingencies are in place to give you certain rights (like protect your earnest money). In a multiple offer situation, it might be in your best interest to give up or modify some of those contingencies.
An example of this would be, instead of doing a 10-day inspection, do it in 3 days. Or promise the sellers you won’t request any repairs on the inspection. You’ll still want to do an inspection of course, but it’s just to check for catastrophic things.
This is similar to making the sellers life as easy as possible. Every house purchasing/offer making situation is unique, but that doesn’t mean you can’t get creative to find a way to help the sellers out.
Secret Number 6: Offer Cash.
I know this isn’t possible for most people. But it is for some.
Maybe you don’t have any immediate cash but what about taking it out of your savings? Or what about getting a HELOC loan on your current house? Or maybe you have a rich uncle somewhere willing to lend you the cash in exchange for interest.
Who knows! I’ve seen buyers come up with money from all sorts of weird places.
Now it should be noted.
All these tips that I gave you do work. I’ve seen them work several times. But they don’t always work. Most sellers want as much money as they can get regardless with how accommodating you are. That said I still recommend doing the above. Because you never know.
When possible, don’t be afraid to offer more money when making an offer. An extra $10,000 only equates to less than $28 a month over 30 years. Probably closer to $50 once you include interest. Which in the grand scheme of things is less than what you’ll spend on coffee in a given month.
About the author: how to win a bidding war without spending more money was written by Tommy Mutchler, an authority and Realtor in Bellingham real estate, Tommy is leading expert in using social media, videos, blogs, and the latest technology to best help serve is clients and community in all things real estate related.
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